Trading markets bouncing around as election nears

Intrade, the online prediction market, has been especially erratic, with the President's chances of winning falling to as low as 56 percent a few days ago before heading back up. (Democrats had been grousing that a single trader was buying Romney shares in order to alter market perceptions of the race, though Intrade denies that happened). At last check, Obama was back up to 63.6 percent, which is still a few points lower than other betting markets. So does any of this really matter? More to the point, how effective are these markets in correctly predicting outcomes? From the NYT's Nate Silver:

Differences between Intrade and the other prediction markets have persisted throughout much of the past two months. Intrade has consistently shown slightly more favorable odds for Mr. Romney than other prediction and gambling sites. According to Brandon Adams, a professional poker player and a teaching fellow at Harvard, Intrade's prices are not necessarily considered more reliable by professional gamblers. Mr. Adams says that Betfair and the sports book Pinnacle, both of which put Mr. Obama's odds at about 63 percent as of early Wednesday morning, feature more sophisticated market participants. However, Intrade is cited far more frequently by the American news media. That at least opens up the possibility that someone could place a wager on Mr. Romney (or Mr. Obama) at Intrade in order to influence the news media's perceptions about which candidate has the momentum.